In them thar hills

The new gold rush on Montana’s federal lands

With the number of new mining claims on federal lands in Montana increasing 75 percent since 2005 and gold selling at $900 an ounce, views like this one from the the Golden Sunlight Mine near Whitehall might become more common sights.

With the stock market swinging in drastic phases between soaring hopes and crushing dreams, economists predict an impending recession. But gold prices remain at all time highs, holding strong at around $900 per ounce. On Wall Street, it’s just dollars and cents, but for Montana, the strong market for gold has spurred a dramatic surge in new mining claims on federal land.

The Bureau of Land Management (BLM) reports that it received over 2,700 new claims for mineral rights on federally owned lands in Montana in 2007.

Greg Albright, a BLM spokesman in Billings, says the rush to file claims represents part of a larger trend over the last decade.

“[Mining claims] come and go with the market just like an oil company,” Albright says. “Lately it’s been going up, the number of active mines that we have.”

The vast majority of prior claims have been renewed as well, he says. But even without these renewals, BLM processes far more new claims than abandoned claims in most years.

Albright says the majority of the new claims come from amateur prospectors whose small diggings look less like Butte’s infamous Berkley Pit, and more like “just someone poking around in the woods.”

“I’m betting that these claims are really just that someone found something cool and wanted to keep it so they put in for a claim,” he says, explaining that given Montana’s long history of gold exploration, the big money veins probably don’t exist.

Nevertheless, at least some of the new claims can be traced back to larger mining interests, the kind that rip off the tops of mountains and tunnel miles underground.

Luke Popovich, a spokesman for the Washington, D.C.-based National Mining Association, says most likely the new claims stem from the healthy gold market.

“Gold stays a little more consistent than the other metals, especially as China and India become the dominant economies,” he says.

According to the BLM over 13,000 mining claims currently exist for federal lands in Montana, all under the provision of the 136-year-old General Mining Act of 1872.

The venerable law, signed by President Ulysses S. Grant, seems antiquated to many, and the fight’s begun to update the act to better reflect modern market conditions and concerns about the environment. Last year, the U.S. House of Representatives passed the Hardrock Mining and Reclamation Act to reform the prior law. That bill would place an eight percent royalty fee on all ore extracted from federal lands as a charge for environmental efforts the government must undertake for new mines.

Former Montana Congressman Pat Williams, representing Western Progress, a liberal think tank and advocacy group, joined a collection of local leaders and conservationists in Helena on Jan. 15 to urge Montana’s top policy makers in Washington, D.C., to change the outdated law. The lobbying efforts focused on Sen. Jon Tester, a member of the Senate Committee on Energy and Natural Resources, where the Senate version of the House mining reform bill awaits action.

“The law is too old. It doesn’t represent what companies want anymore, and it fails to represent the way the public wants to see mining handled nowadays,” says Williams. “Currently it’s too easy to get a claim, and too easy to walk away without doing anything after.”

Under the 1872 law, all U.S. citizens 18 years or older may file for a hard rock or placer (gravel) mining claim on federal lands open to mineral removal. According to Albright, filing a claim requires little more than some simple paperwork and a $150 fee.

“A few years ago we had a company just go out into the woods and essentially throw stakes into the ground,” he says, recalling that the firm filed for at least one hundred claims. “Of course most of those weren’t approved, but you get my point.”

While the mining industry wouldn’t mind some type of reform, their spokesman Popovich says, he balks at the steep royalty fee included in the House reform bill.

“An eight percent royalty fee doesn’t make economic sense for us. It would effectively kill the mining industry,” he says. “It’s sort of like moving the goal posts halfway through the game.”

Williams disagrees and says the cost of environmental reclamation should not rest entirely on the public. “Look, mining is a dirty business. We all know that, but investing in the clean up efforts of mining would help the industry far more than harm it,” he says.

Both men recognize that with the explosion of new claims, some type of reform is needed to bring the industry into the modern day. But the battle lines are forming to determine who—the public or the mining industry—should pay for what.